Employment taxes, also known as payroll taxes, are the federal and state taxes that each business is required to withhold for, and pay on behalf of, its employees. Because the employer is responsible for collecting both these taxes and turning them over to the IRS, employment or payroll taxes are classified as a trust tax, and non-payment of payroll taxes is viewed as theft by the IRS.
Failure to pay payroll taxes will subject your business to substantial penalties. If you have missed at least one payment, but make future payments, the penalties will be imposed on a cascading basis. For example, if you missed a single payroll tax payment 8 weeks ago and make the next payments in full and on time, the IRS tends to apply the next week’s payment to the missed one, causing the penalties to keep cascading. A simple $1,000 penalty could grow tenfold over a few quarters, misstating the actual penalties by many thousands of dollars.
If your business has fallen behind on the payment of payroll taxes, it is essential that you engage an experienced attorney to act on your behalf to protect your rights and the assets of your business.